Barr River Capital has an investment horizon of three to five years.  Our research and experience has proven not all high performing companies make good investments.  An investor must always consider the value of the business based on its ability to generate future cash flows relative to the invested capital required to generate those returns.  It is this understanding and the application of our research which allows us to deliver high performance investment returns for our clients.

     It has been demonstrated in the academic literature of investment finance that short–term focus does not enhance investment results, and often decrements returns. Thus, we seek a reasonable time period so the views generated by our research can become know by the overall market and reflected in the price of our holdings.  Academic research has proven, investors outperform the market by identifying companies whose future ability to generate or destroy returns on capital are not fully appreciated by the overall market.  This suggests two things: 1) we believe a minimum of two years is necessary before we can expect realization of the bulk of the risk-adjusted excess returns, and 2) market capitalization can strongly affect the amount of risk-adjusted excess returns.  Twenty years of professional experience has proven that a long-term focus is critical to successful investing.  Also, since Barr River looks for market inefficiencies in order to generate returns, we find the mid-cap universe is the most fertile ground for discovering market inefficiencies.  The reason this inefficiency exist is larger capitalization company prices tend to reflect all known information since they are more commonly studied.  At the other end of the spectrum, small to micro capitalization companies create liquidity difficulties, which tend to erode returns.